AfDB, COMESA in talks to harmonize consumer price indices in Africa
COMESA in collaboration with the African Development Bank (AfDB) are conducting a five-day regional workshop in Naivasha on harmonizing consumer price indices in Africa. The aim is to improve measurement process of national and regional Harmonized Consumer Price Indexes (HCPIs).
This initiative follows an agreement signed last year between COMESA and the AfDB in which the latter would be the Executing Agency for Statistical Capacity Building Program Phase V (SCB V) which targets 37 African Development Fund eligible countries.
Among the areas of intervention in the SCB V is the support to harmonization of consumer price indices in the target countries and support to RECs for the compilation of regional HCPIs.
Through their respective Ministerial mandates, the RECs have continuously advocated for their Secretariats and Member countries to prioritize requirements of the agenda 2063, the global agenda 2030 for sustainable development and regional policies through the production and use of harmonized statistics including HCPIs.
This is in recognition of the fact that successful regional integration requires accurate, reliable, timely, harmonized and comparable data within and across RECs to support policy planning, monitoring and evaluation. Thus, the RECs constitute the cornerstones of the integration agenda and therefore need to build commensurate statistical capacity over time to facilitate the process towards full integration.
COMESA Head of Statistics, Mr. Themba Munalula says it is planned that all AfDB’s Regional Member Countries (RMCs) undertake a rebasing of the price reference period of their HCPIs in the near future. Rebasing refers to changing the price reference period of the HCPI to a more recent period.
In this workshop, the different steps of the rebasing process as well as general procedures to aggregate a consumer price index or to introduce a new set of expenditure weights was discussed. The objective is to ensure that all RMCs are tooled with the same level of knowledge and applications, which is a key aspect of a successful maintenance of harmonized concepts, methods and procedures used in the compilation of national and regional HCPIs.
The long-term objective, said Mr Themba, is to derive a continental HCPI using harmonized individual country national HCPIs. This requires a common methodological approach to ensure the international comparison of inflation, at least within RECs or at the continental level.
He stressed the importance of assisting RMCs and RECs to get a deep knowledge of the general rebasing of a national HCPI using the latest Household Budget Survey (HBS) data available for each of the participating RMCs.
He added: “It is also important to ensure that all RMCs have the same level of understanding of the full process of incorporating a new set of expenditure weights in the HCPI compilation, for the index to continue to reflect as much as possible the evolving patterns of consumer purchases.”
This process includes the processing of data from the latest HBS data or from other data sources, the weight estimation process as well as the price-updating of expenditures between the expenditure reference period and the weight introduction month.